A good project manager is optimistic. The way you handle failure reflects the true leader in you. If your team worked on a project and it ultimately failed, they are bound to be unhappy. But as a manager, it is your duty to ensure that failures don’t affect the morale of the team. You can tell the interviewer that instead of blaming a particular person or a group, you make it a collective responsibility. Also, mention that you communicate to the team members to learn from the mistakes they made in this project and not repeat them in the future.